Topic: State & Local Issues

Ever since the 1970s, when Jude Wanniski and Arthur Laffer came up with the ideas that are now referred to as supply-side economics, conservative politicians have been unable to resist the siren song of tax cuts for big earners. In recent years, this enthusiasm has spread to state governments led by conservatives, offering new tests […]

In a remarkable statement, Governor Alejandro Garcia Padilla announced this week that Puerto Rico’s debts are “not payable.” Nobody was really surprised. The island can work its way out of this financial mess with a two-pronged strategy: An aggressive short-term effort to raise taxes, cut spending, and improve financial controls combined with a long-run plan […]

Kansas is grappling with a self-inflicted budget crisis. In 2012 and 2013, the state decided to experiment with major income tax cuts and an exemption of most small business and partnership income aimed at boosting the economy. The experiment is not going well to say the least. Now, faced with a serious budget gap and […]

The idea is straight out of Economics 101: If you want people to do less of something, raise the price. And California desperately needs its residents and businesses to use less water. So rather than trying to curb water use through a complex maze of regulation, why not just raise the price though a new […]

Politicians looking to “enhance revenue” without raising taxes might want to take a close look at Louisiana, where Governor Bobby Jindal may have found the promised land of conservative tax policy. He’s promoting a plan to raise $526 million without a tax increase. His trick: Turn refundable business credits into non-refundable credits. With a refundable […]

State forecasters expect revenue growth to remain sluggish through fiscal year (FY) 2016 according to an Urban Institute analysis of agency reports. In FY17, states project revenue growth will return to its average post-2000 rate but remain significantly below its long term average. These state estimates are not adjusted for inflation. Using CBO’s forecast of […]

Increasingly, states are tying tax cuts to revenue targets. It sounds reasonable enough: If a state collects more tax than it needs to fund government in a future year, rates automatically go down. But such tax triggers open the door to shameless budget gimmickry. The latest poster child for this is Oklahoma, which enacted a […]

Oil prices are dropping…fast. This may be good news for drivers but not so good for a handful of states that use energy tax revenue to help fund their budgets. It may be especially challenging for states that rely on taxes from production of shale oil that uses methods that may be practical only at […]

While most national attention is focused on which party will control the Senate and who will win the 36 gubernatorial races, many states also have fiscal initiatives on their ballots. And a few may provide some clues to how the public feels about the trade-off between taxes and government services. Many of the 16 tax-related […]

Jean Tirole is an influential, respected, and by all accounts gracious man who won this year’s Nobel Prize in economics. Bertha is a 7,000-ton tunnel boring machine that’s been stuck under Seattle for nine months—but is still tweeting—as state officials and a private contractor battle over who should pay to get her out. What do […]